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Back to the Future of CRM - Part 2 of 4
By Enabliser Howard
In our previous blog, we noted that as CRM experts, people ask Enabling about the benefits of a CRM system and how best to approach implementation. One of the best articles I’ve seen on this is from Harvard Business Review in 2004 – good information backed up by research. This discussion continues with more insights form this article, they still apply today. In Part 1, we discussed starting small and focused, rather than trying to save the world, and four strategic questions to ask: Is it strategic? Where does it hurt? Do we need perfect data? And where do we go from here? We now look at the first question.
Is it strategic?
CRM involves business and technology issues and significant investment. It should be applied to processes vital to a company's competitiveness: for competitive advantage, or to avoid falling behind the industry. If it is not strategic, it is difficult to overcome inertia and make the organisation changes needed if we are to achieve the expected returns.
The first company studied, an aircraft parts distributor, appointed a new CEO who wanted to transform them into the premier supply chain vendor for aviation. By partnering both manufacturers and the aeroplane fleet owners, they wanted to consolidate demand and strengthen sales and margins. The huge problem was poor information and cumbersome processes in sales and service. Sales people were often trapped in the office helping enter orders instead of making calls. Time and territory management were also poor, causing inefficiency and haphazard service. Customer calls were often directed to distant offices which lacked up to date data on orders and products.
Weak customer service left accounts vulnerable, undermining the ability to charge premium prices for what should have been flawless service. A better trained sales force was critical. So in conjunction with sales and IT, this was the CEO's priority rather than a full scale implementation of CRM across the company. They installed CRM for the sales people, order entry and for the call centre. The goal was to coordinate customer information from outside sales people, and to inside sales support, then to customer service people in call centres. The narrow focus allowed sales staff to become familiar with the system without being overwhelmed, and allowed quick victories to win broader support.
The gains were striking. Previously sales staff relied on an outmoded database: it was hard to obtain even basic information on customers' order history and credit status. "Credit problems didn't get flagged till you placed the order…and you either had to have the customer on hold for 15 minutes or call them back. If you don't have the right product, the right information and the right price…together… you lose the call,…90% of the time you lose the sale." With the new system the customer's history and credit status instantly popped up on the order entry screen.
The rich information caused a revolution in service: it helped sales staff become more organised, spurred them to make more calls, knowing they could deliver firm quotes on tailored products and services. Placing an order previously needed 11 screens and 50 steps; with the new CRM system it took one screen and 10 steps. After four months, sales calls tripled, customer numbers grew by 33%, productivity in sales and service skyrocketed. This helped recapture market share and win large orders. Order numbers jumped from 1,000 per day to 2,500, with lower error rates and no extra staff.
This wholesale distributor reshaped as a full service provider of aviation logistics. Sales and profits grew rapidly as market share increased. Rolls Royce awarded them a 10 year contract - the largest deal ever struck in the industry. "We showed Rolls Royce the level of visibility we had into our customer base (which) we could share with them to give a deeper understanding of buying trends…A simple analysis showed (they) had several years' worth of supply in some products while being understocked in others because it was not matching manufacturing with customer demand. That was pivotal in winning the contract."
As an organisation whose business is implementing CRM systems, we find these insights are still the normal types of benefits that are possible. It is not rocket science. It is normal CRM.
This discussion on Back to the Future of CRM will be continued.